Home Sales Fall

Progress in reaching a deal to end the conflict in the Middle East caused oil prices to decline, which was positive for both stocks and bonds. Other than that, it was a light week for economic data, and the reports caused little reaction.

In March, sales of previously owned homes fell 4% from February, below expectations, to the lowest level since June 2025. Existing home sales were down slightly from a year ago. The median price of $408,800 was up just a slim 1% from last year at this time. Inventories remain stuck at low levels, standing at just a 4.1-month supply nationally, well below the roughly 6-month supply typical in a balanced market. However, inventories were 2% higher than a year ago. Homes are remaining on the market for a median time of 41 days, up from 36 days last year at this time. The National Association of Realtors now expects existing home sales to increase just 4% in 2026, down from its previous forecast for an increase of 14%, and it expects new home sales to be flat this year.

A survey of home builder sentiment on housing market conditions from the NAHB unexpectedly fell four points to 34, the lowest level since September 2025. It has remained in negative territory below 50 for twenty-four straight months. According to the NAHB, 60% of builders used sales incentives in April and 36% cut prices. 62% of builders reported that suppliers have increased building material costs due to higher fuel prices. 

Looking ahead, attention will remain fixed on the conflict in the Middle East. Investors also will monitor comments from Fed officials about future monetary policy. It will be a light week for economic data. The most significant report will be Retail Sales on Tuesday. Since consumer spending accounts for over two-thirds of U.S. economic activity, the retail sales data is a key measure of the health of the economy.